Question 27 of 200 from exam PRINCE2-PRACTITIONER: Practitioner Project Management Certification

Question 27 of 200 from exam PRINCE2-PRACTITIONER: Practitioner Project Management Certification

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HOTSPOT - Scenario - A central government department, the Ministry of Food Hygiene (MFH), faces increasing pressure to cut costs, better manage suppliers performance and reduce the confusion caused by inadequate internal controls, outdated standards and outdated technology.

External consultants were employed to conduct a feasibility study to identify options to address the problems, and the likely costs and benefits.

The following options were considered:Do nothing.Re-engineer selected business functions.Outsource selected business functions.

The feasibility study concluded that there was a case for outsourcing the MFH Information Technology Division and the Facilities Division (maintenance of buildings and grounds)

The recommendations were:One service provider should be contracted to provide the services currently provided by the Information Technology Division and the Facilities Division.A 10-year service contract should be agreed with the selected service provider.

The feasibility study developed high-level designs of the current organization, processes, systems and operating models, plus an outline Business Case for the required project.

The external consultants also made the following recommendations for the management of the project:Use PRINCE2.Set up the project with 4 management stages: Stage 1

Standard PRINCE2 initiation activities.

Stage 2

Create detailed designs (future organization, processes, systems and operating models) and the service level agreement between MFH and the future service provider.

Stage 3

Request and evaluate proposals, select service provider and agree contract.

Stage 4

Transfer equipment and staff, transfer responsibility for service provision and run trial period.

Initial estimates indicated that the project would cost 2.5m and take two years to complete.

MFH senior management agreed that there was a case for outsourcing, and accepted the recommendations as a basis for the project.

There is an expected saving of 20m over 10 years.

The Outsourcing project has completed the Starting up a Project process and is now in the initiation stage.

Because of the strategic importance of the project, the MFH Chief Executive Officer has taken the role of Executive.

A PRINCE2-experienced Project Manager has been appointed from within MFH.

Staff within the business functions being outsourced will work with the external consultants who conducted the feasibility study to define the detailed designs.

Lines 1 to 6 in the table below consist of an assertion statement and a reason statement.

For each line identify the appropriate option, from options A to E, that applies.

Each option can be used once, more than once or not at all.

Hot Area:

Assertion Reason T | The selected service provider should | TrueFalse | All project costs, including | TruelFalse have their own Business Case for the the cost of work carried out work they are doing on the by extemal suppliers on the Outsourcing project. A. | project should be included in the customer's Business Case. 2 | The cost of managing the TruciFalse | The informationin the TruelFalse outsourcing contract should be Business Case is used to included in the Business Case. ‘compare the development, B__| maintenance and operational costs with the value of the benefits overa period of time. 3 | The Business options sectionofthe | True/False | The Business options section | True/False Business Case will need tobe of the Business Case updated if the industry standards for describes options that have outsourcing. are changed. € been considered to address the business problem. 4 | Any expected benefit from TruclFalse | The Business Case should list | TruelFalse increasing staff flexibility should be each benefit thatit is claimed included in the Business Case. would be achieved by the D__| project's outcome. 5 | The End Project Report should True/False | Allbenefitsin the Business | True!False identify whether the expected Case should be achieved savings of £2 over 10 years have E beforea project is closed. been achieved. © | The Project Board shouldensure | TruciFalse | The Benefits Review Planis | TruclFalse that the Benefits Review Plan created in the initiation stage. includes the mechanisms for FE measuring all the claimed benefits of outsourcing.

Explanations

Assertion Reason The selected service provider should [TrueiFalse | All project costs, including | True/False have their own Business Case for the the cost of work carried out work they are doing on the by extemal suppliers on the Outsourcing project. A. | project should be included in the customer's Business Case. The cost of managing the True/False | The informationin the Troc/False outsourcing contract should be Business Case is used to included in the Business Case. ‘compare the development, B__| maintenance and operational costs with the value of the benefits overa period of time. The Business options sectionof the | True[False | The Business options section | True{False Business Case will need tobe of the Business Case updated if the industry standards for describes options that have outsourcing. are changed. € been considered to address the business problem. ‘Any expected benefit from increasing staff flexibility should be included in the Business Case. The Business Case should list each benefit that it is claimed would be achieved by the project's outcome. True|False The End Project Report should TruelFaise | Ailbenefitsin the Business | True!False identify whether the expected Case should be achieved savings of £2 over 10 years have E before a project is closed. been achieved. ‘The Project Board should ensure TruefFalse | The BenefitsReviewPlanis | True{False that the Benefits Review Plan created in the initiation stage. includes the mechanisms for FE measuring all the claimed benefits of outsourcing.
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